This is a question I get all the time. Ok, not "all the time" but often enough and occasionally with derision that I feel it should be addressed...as publicly as possible of course. ;)
The first thing you need to know is that it's not a set in stone sort of thing. Each agent has the autonomy to set their own fees and can have a schedule of what those fees include or exclude. For example, when I'm working with a seller client I have a set fee but I have a lot of necessary add ons that I pay for.
Since my whole brand is "no gatekeeping" I'm going to tell you the truth. I charge 7% on the first $100,000 and 3% on the balance. That sounds like a lot but I also split that with the Buyer's agent. The split isn't 50/50 because the seller's agent (me, in this case) takes on a lot more expenses when selling a home.
I pay for a bunch of standard things like:
professionally designed brochures
professional photos
professional video
social media advertising
mls listings and ads
and basically anything my client wants by way of marketing.
Depending on the home I may pay for some extras like:
a pre-inspection (not many agents I know pay for this but I do it for a reason*)
neighbourhood postcards advertising the home for sale
paid online ads
again, anything my client really wants to see happen.
I have had 100+ conversations about the value of realtor fees and if you were just to take what an agent does after they get the listing then I could see how that fee may feel high.
However, what happens before the listing is secured? I have clients that I have been working with for the entirety of my real estate career. (over 8 years) I have sent them consistent updates on the market, changes to bylaws that might affect their home value, strategic plans, financial plans. I've set them up with whatever professional they need from painters and financial planners to care home providers.
I'm there for my clients. I answer the phone. I help them understand that market and I never, EVER push them to make a decision they may regret. The best way to do that is to just provide ALL of the info, provide context as per my expertise and then allow them to make the decision that is right for them.
I only make money when the deal is done. Even when a home sale goes from initial meeting to listing in a few weeks it will, almost always, be several months until I see anything from it. And, if the home does not sell for some reason I may not see anything from the hours of work invested.
Another question I often get is "can you lower your fees?" to which my answer is always "no, I can't."
There are a few reasons why a professional and experienced Realtor® won't reduce their fees.
I have a professional designation that makes me an expert in a particular area of business. In this case real estate. I have taken numerous courses and been to so many conferences for professional development that I have lost count. As such I promise I know enough to make sure that you are being represented fairly and professionally. Criminals never ask their lawyer for a discount ;)
....and this is my favourite reason; IF I lower my fees that means that I do not have the negotiation skills needed to be of any use to my clients. When I have a vested interest in the outcome and allow someone to convince me to take a lower fee I diminish my skill set. I pride myself on being an excellent negotiator. How can I go to bat for you if I can't do it for myself?
I'm always going to be open and upfront about my fees. You pay me to do the very best job possible and, for that, I am grateful and motivated.
There are lots of discount brokerages available to those clients who don't think that Realtor® fees are "worth it". I don't have any issues with people who prefer to go that route. I wish you luck with your sale but using a professional agent has been shown to yield a much higher selling price so, in the end, going for the discount is, statistically likely, to have you leaving money on the table.
Call me and we can run through some strategies. You may not be anywhere near selling now but once I'm in your corner you will definitely have all of the info to make the right decisions.
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